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As schools struggle with costs, special education takes a toll

Gov. Dayton is greeted by students at Dakota Meadows Middle School during a visit there Friday, Feb. 5, 2016.Darren Gibbins | The Free Press

With the legislative session in its last full week, school funding is still a sticking point between lawmakers and Gov. Mark Dayton. The governor has made "emergency" school funds one of his central demands, citing the budget shortfalls facing many districts.

One big driver of those shortfalls is special education. The category accounts for one-fifth of general-fund education spending in Minnesota, and its cost is rising.

Districts spent a total of $2.2 billion on special education last year, an increase of 26 percent over a decade even after adjusting for inflation.

Special education touches families in every part of the state. In total, 141,237 students receive the services for a wide range of reasons, including physical impairments, learning disabilities and behavioral issues.

One student, Amy Baker's son Josh, found the support he needed for his autism when he enrolled as a first-grader in what was then Fraser Academy. Baker said the Minneapolis charter school minimized how often Josh was pulled out of class for special education.

"He did not want to be different. And so, this school made him feel like he was just one of the kids," Baker said. "If he needed a little speech help, he got a little speech help. If he needed some writing help or reading help, he got that."

More students are receiving special education services than in the past. In 2016, 16.1 percent of Minnesota students received the services, up 1.3 percentage points over a decade.

But it's not just that more students need help. The cost per student of delivering that help has also increased.

In Minneapolis, school officials said improvements in lessons and technology cause cost increases. The district has worked to reduce expenses by moving teacher training online and sharing resources across general and special education programs.

Still, one cost in particular keeps growing.

Districts are billed for special education students who live in their district even if they don't go to school there. Whether it's a charter school or a school in another district, the school the student attends charges back at least 90 percent of costs not covered by state and federal funding. Charter schools and other entities that enroll more than 70 percent special education students bill back all unfunded costs.

"We want to ensure that students get the level of service they need," said Minneapolis district lobbyist Josh Downham. "However, when we have to subsidize a portion of the services that are provided at the charter school, it makes it more difficult for us to provide that same level of service at the school district."

Downham said Minneapolis' bill from charter schools has more than doubled since 2013, and the total cost from charters and other districts last year was $22.9 million.

That income can be crucial for charter schools.

Leaders at Lionsgate Academy in Minnetonka, where Amy Baker's son is currently a sophomore, said their school wouldn't exist without that money. Charters can't levy taxes like school districts do.

Finance director Ron Berger said Lionsgate operates on a thin margin. "We don't own our buildings; we end up leasing them. They're not brand new; they're used office buildings that we retrofit at substantially less than the cost of building new. The furniture in this building is largely donated or acquired at bargain prices."

Outside the metro, some district leaders say it's not the families leaving that drive up costs — it's the families arriving. Bruce Hentges, a St. Cloud Area School District board member, said the schools attract families with special-needs children because of St. Cloud's health care facilities and the district's large size.

Each student who receives special education carries a cost not covered by state and federal money. St. Cloud is one of many districts that draw money from other budget areas to fund special education services that are required by state and federal law.

Hentges said the district agrees the services are needed and useful.

"Our only argument is since the state mandates a level of services, then it ought to also fund those services," Hentges said.

In southern Minnesota, the Albert Lea Public School District has joined with nearby Austin Public Schools to reduce special education costs by sharing services for two high-need disabilities.

Schools may soon be forced to have more direct conversations about special education spending, said Marguerite Roza, Georgetown University researcher and Edunomics Lab director.

"In some circles, special education has had a pass from all the productivity, cost-pressure discussions that have affected the rest of the school district budget. I don't think they're going to get a pass forever," Roza said.

It's not just Minnesota; Roza said special education costs are on the rise nationally. One way to control the increase, she said, is to talk more about it. She said principals and teachers don't tend to talk about the total price of services and ways to increase productivity.

"I think that's where you might get, 'The schedule is all wrong,' or, 'You have me working with this one girl first thing in the morning, she's always late to school. Can we switch the schedule so I'm working with her in the afternoon?'" Roza said.

She said schools should also talk to parents about cost and get feedback on the best way to educate their children.

If district leaders don't start the conversation, she added, rising costs will soon start it for them.